The pandemic has unexpectedly led to an unprecedented boom for sports cards. Whether it’s the boredom of the pandemic or the speculative mentality that fueled the Gamestop run-up, sports cards have become a serious business, with a number of high-value cards trading at all-time highs in the multi-millions. StarStock is a centralized platform structured as a stock market that allows serious and casual collectors to easily purchase and sell their favorite sports cards. Users submit their cards to a repository with StarStock acting as a custodian. Trades of these cards occur on the platform and there is no need to ship the physical card as StarsStruck records the change the ownership similar to settlement for equities. The marketplace is dynamic with prices changing in response to events in the sports world, providing unparalleled liquidity to a previously sparsely-traded market. For this convenience, the company charges a 5% fee taken from the seller’s proceeds.
AlleyWatch caught up with CEO and Cofounder Scott Greenberg to learn more about the company’s mission to turn sports cards into an investment class, the company’s future plans, and the latest round of funding, which brings the total funding raised to $9.3M for the two-year-old company.
Who were your investors and how much did you raise?
We raised an $8M Series A round led by Andreessen Horowitz, with participation from several angel investors including NBA all-star Trae Young, Twitch Cofounder Justin Kan, Chief Operating Officer of BetMGM, Ryan Spoon, and Ilkka Paananen, Cofounder of Supercell.
Tell us about the product or service that StarStock offers.
StarStock is a stock market for sports cards where sports fans can trade their favorite players instantaneously and at scale. All of the cards on our site are stored in a centralized vault, which enables our users to buy and sell their favorite players without needing to ship the cards back and forth.
What inspired the start of StarStock?
StarStock was inspired by our own experiences trading sports cards on traditional marketplaces. My cofounders Nigel Eccles, Mike Kuchera, and I wanted the ability to trade players instantly, which would allow us to day trade players while we are watching the games. We realized that card traders like us wanted ownership of the card, but didn’t actually need to possess the physical card. By separating ownership and possession, we’ve created a fast-moving market that’s able to capture real-time price movement of athletes.
How is StarStock different?
StarStock allows you to own a sports card without having physical possession, making it easy to trade cards instantly. Our market indices, game schedules, and player stats make StarStock the best place to research and trade cards.
What market does StarStock target and how big is it?
The sports card/sports memorabilia market is valued at approximately $5B. However, our goal is to build a product that appeals to all sports fans and not just sports card traders.
What’s your business model?
StarStock offers instant trading, while keeping your cards secured and insured in a vault. We charge a 5% seller fee on all transactions.
How has COVID-19 impacted your business?
The sports card market has seen massive growth during the COVID-19 pandemic. With so few sporting events taking place in 2020, sports fans were looking for alternative forms of sports entertainment. Additionally, many of us had extra time to look through our old card collections in the attic or basement, which reignited a passion for the space.
We’ve seen a surge of new users during COVID because we enable people to trade cards without needing to meet in person or even exchange possession of anything.
What was the funding process like?
As we began our funding process, our goal was to align with a group of investors that believe in our mission to revolutionize sports card trading. We couldn’t be more excited to be partnering with Andreessen Horowitz and having Jonathan Lai (Partner on Andreessen Horowitz’s consumer investing team), join StarStock’s Board of Directors, as they share our passion for sports collectibles and will be incredible assets as we continue to grow our company.
As we began our funding process, our goal was to align with a group of investors that believe in our mission to revolutionize sports card trading. We couldn’t be more excited to be partnering with Andreessen Horowitz and having Jonathan Lai (Partner on Andreessen Horowitz’s consumer investing team), join StarStock’s Board of Directors, as they share our passion for sports collectibles and will be incredible assets as we continue to grow our company.
What factors about your business led your investors to write the check?
Our investors saw that we are creating a customer-centric product that makes it very easy to collect and trade cards. They also saw that we have a passionate and engaged user base that loves using our product.
What are the milestones you plan to achieve in the next six months?
Our mission is to create a seamless way for sports fans to trade and invest in their favorite athletes. Our new funding will allow us to scale our card processing team and continue to enhance our product further, leading to an even better user experience
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
StarStock was very bootstrapped during our first 12-18 months. Our advice to fellow New York companies is to stay focused on creating an amazing experience for your customers and the money will follow.
Where do you see the company going now over the near term?
Right now, our primary goal is continuing to build a product that makes it easy for any sports fan to invest and trade sports cards. We’re also focused on adding more liquidity to the site and providing data and pricing information to help our customers make educated investments.
What’s your favorite outdoor dining restaurant in NYC?
Shake Shack.
